EasyJet’s biggest shareholder, the family of founder Stelios Haji-Ioannou, has decided not to support the budget airline as it looks to raise £1.2 billion from its backers.
After rejecting a takeover. reportedly from Wizz Air, the carrier asked shareholders if they would support it with a cash injection via a rights issue to get the balance sheet back on track and to invest in a new generation of aircraft to improve efficiency across the board.
However, the Haji-Ioannou family have sold their rights to buy new shares, a source familiar with the situation said.
EasyJet’s biggest shareholder, the family of founder Stelios Haji-Ioannou, has decided not to support the budget airline as it looks to raise £1.2 billion from its backers
When a company launches a rights issue, it will offer existing shareholders the chance – or right – to buy new shares, invariably at a discount to the prevailing price.
The size of the discount depends on the amount of new money being raised, the way the company is perceived by investors and general market conditions.
The Haji-Ioannous, who originally made their fortune in the shipping industry, have sold 76.3 million nil paid rights at £1.65, a 15 per cent discount to the closing price of the rights on Thursday, said the source.
The family has repeatedly said it did not plan to plough more money into easyJet while the airline sticks to a deal with Airbus to buy more planes.
As a result of the rights issue, the family’s stake is set to reduce to 15.2 per cent from 25.3 per cent when the new shares go live on September 28.
EasyJet has already raised more than £5.5billion since the start of the Covid crisis including £420 million from shareholders.
It has also employed a number of cost-cutting measures which have included selling planes, furloughing staff and letting go of up to 4,500 employees, or about 30 per cent of its workforce.
When it comes to its finances, easyJet reported its first ever annual loss last year – of £1.3billion – and has lost another £1billion in the first nine months of this financial year.
Both easyJet and a representative for the family declined to comment on the rights issue.
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